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| This Summary of Project Information is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. |
Summary of Project Information (SPI) |
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| Project number | 11085 |
| Project name | GMFI - Microenterprise Credit Romania |
| Country | Romania |
| Sector | Finance & Insurance |
| Department | Global Financial Markets Group |
| Company name | ProCredit Bank S.A. |
| Environmental category | FI |
| Date SPI disclosed | August 19, 2001 |
| Projected board date | October 10, 2001 |
| Date revised SPI disclosed | August 28, 2001 |
| Status | Completed |
| Previous Events | Invested: April 24, 2002
Signed: April 11, 2002
Approved: September 28, 2001 |
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| Project sponsor and major shareholders of project company |
Microfinance Bank Romania (MFR) is expected to be formed from the existing Microenterprise Credit Romania (MCR) and is jointly sponsored by IFC, EBRD, Kreditanstalt fur Wiederaufbau (KfW), Internationale Micro Investitionen (IMI) and Commerzbank. The technical partner is Internationale Projekt Consult (IPC).
IPC, the project technical partner, was established in 1980 in Germany, and is a leading international consulting and financial services company specializing in development and management of microfinance institutions. IFC has a global relationship with IPC, and is currently working with IPC in Bosnia, Georgia, Haiti, Moldova and Ukraine, among other countries. IMI was established by IPC in 1998, to provide an investment vehicle for IPC-managed microfinance ventures in developing and transition economies. IFC subscribed to a 16% stake in IMI in November 2000 for US$2.0 million equivalent. EBRD has successfully collaborated with IFC on microfinance projects in Albania, Bosnia, Moldova, Ukraine and Georgia. KfW is the German Government's bilateral lending agency, and is a shareholder in IFC investee microfinance institutions FEFAD Bank (Albania), MEB (Bosnia), MFB (Ukraine) and MBG (Georgia). Commerzbank is Germany's third-largest bank group, with a network of over 900 domestic branches and significant international operations in asset management, investment banking and insurance. As of Q1 2001, Commerzbank Group reported total assets of Euro 492.9 billion and equity of Euro 12.7 billion. |
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| Total project cost and proposed IFC investment |
| The total project cost is US$9.0 million. IFC’s proposed investment US$2.025 million equivalent for a 22.5% shareholding MFR. |
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| Location of project and description of site |
| Like MCR, MFR will be headquartered in Bucharest with branches in Bucharest, Brasov, Cluj-Napoca and Timisoara. MFR plans to expand its branch network gradually in order to serve a nationwide micro and small enterprise target group market. |
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| Description of company and purpose of project |
MFR's strategy is to become a market leader in micro and small business finance in Romania by building on its competitive advantages in the credit market. MCR currently has a small loan portfolio of US$2.0 million. MFR will diversify its product range and geographical reach in 2001 and 2002, especially in Transylvania and the Romanian border regions.
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Following approval of its Global Microfinance Facility in 2000, IFC has moved rapidly to invest in new microfinance institutions in Europe, Latin America and East Asia, and to strengthen relationships with its strategic partners in the for-profit microfinance field -- EBRD, DOEN Foundation, KfW, FMO and IMI. MFR was one of the sub-projects approved within the Global Facility. IFC has played an important role in creation and support of strategic alliances with partners to develop the for-profit microfinance industry in the Balkan Region (MEB Bosnia, MEB Yugoslavia, Pro Credit Bulgaria, FEFAD Albania) and has catalyzed private sector involvement for the proposed investment in MFR.
Microfinance schemes have shown a major positive impact in alleviating poverty and unemployment in emerging markets worldwide, and -- in recognition of this strong developmental impact -- almost all multilateral and bilateral institutions and donor agencies are actively promoting microfinance schemes. Similarly, the proposed investment in MFR is expected to be strongly developmental -- in terms of its economic impacts, stimulus for business reconstruction, employment generation, confidence-building in the banking sector, and introduction of commercially-oriented microfinance techniques to Romania. MFR is expected to have a significant demonstration effect through introduction of best practice commercial banking techniques and professional credit analysis in Romania. |
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| Environmental and social issues - Category FI |
This is a category FI Type 1 project according to IFC’s environmental and social review procedure. IMI and project technical partner IPC have developed an environmental management framework to ensure that financial institutions in which IMI invests and IPC manage have appropriate Environmental Management Systems (EMS). IFC's Environment Division has approved this environmental framework. Under the framework, IPC and IMI will guide MFR in the development and implementation of an EMS, requiring activities financed to comply with the applicable environmental, health and safety legislation and standards of Romania and IFC’s Microfinance Exclusion List. Implementation of the EMS may involve an orientation in cleaner production and a focus on clients presenting the greatest environmental risk and opportunities. MFR will provide an annual environmental performance report to IMI/IPC.
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| To contact the project company, please write to: |
MFR Head Office, Bucharest
Str. Stirbei Voda nr. 95, bl. 25B, et. 1, ap. 4
Sector 1, Bucharest, Romania
Phone/Fax: (40-1) 221 94 94 |
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